Religious atmosphere, law enforcement, and corporate social responsibility: Evidence from China

Using a sample of 4186 firm-year observations from the Chinese stock market during the period of 2007-2009, we examine the influence of religious atmosphere on corporate social responsibility (CSR) and the moderating role of law enforcement. Specifically, based on hand-collected data on religious atmosphere, our findings show that religious atmosphere is significantly positively associated with CSR, suggesting that religious atmosphere plays an important role in strengthening CSR. Moreover, law enforcement attenuates the positive association between religious atmosphere and CSR, implying the substitutive effects between religious atmosphere (informal system) and law enforcement (formal institution) on CSR-increasing. In addition, above conclusions are still valid after using the change model to control for the potential endogeneity between religious atmosphere and CSR.